How much tax do you pay on property in Spain?


Amid the continuing dreary news agenda in some quarters lately, many of us could do with new dreams to chase. And for many of us, one of the biggest dreams is acquiring a home in Spain of our very own, perhaps with the help of a leading real estate agency in Sotogrande like those advertising their listings through our own online property portal.

But even if you have been browsing the latest properties for sale via Property Sotogrande, it is important to bear in mind that you won’t just be paying the ‘headline’ purchase price if you do decide to buy.

Taxes and other costs can add a further 10% to 15% to the amount you pay for a Spanish home, apartment or villa overall. So, what are the taxes you can expect to pay, and at what level?

The exact taxes you pay when buying will depend on a range of factors

If you are looking to buy a Spanish property, as a broad rule, you can expect to pay between 8% and 11.5% in taxes as part of the purchase transaction. But exactly what you pay will depend on whether you are purchasing a new home – in other words, one that has never changed hands previously – or a resale property, this being the term for homes that have been sold at least once in the past.

When buying a new-build property in Spain, there are two taxes that you will be liable for: VAT (otherwise known as IVA in Spain) and stamp duty (also referred to as AJD or legal documentation tax). As for buying a resale property, there will be just one tax levied on the purchase in this case: transfer tax, which is also called Impuesto de Transmisiones Patrimoniales or ITP.

What about the situation for those buying in Andalucia?

You might think the Andalucia region in which Sotogrande is located would be especially attractive to would-be property buyers on account of such factors as its considerable cultural and heritage attractions, picturesque scenery and great sporting and leisure amenities – and that would be true.

However, the low levels of taxation levied on property purchases in the area is continuing to make it an even more alluring destination. Since 28th April 2021, for example, the aforementioned property transfer tax for purchases of resale homes in Andalucia has been just 7% for all residential properties, regardless of their sale value. This replaced the previous sliding-scale system that saw property transfer tax applied at between 8% and 10%, depending on the sale price.

As for stamp duty in Andalucia – which, as we touched on above, is only imposed on purchases of new-build properties – this is currently a mere 1.2%, down from the previous 1.5%. That equates to a 20% tax saving.

Furthermore, while these reductions were initially supposed to be temporary measures in the wake of COVID-19, in October 2021, Andalucia approved a law that renders them permanent. You can therefore take advantage of them as a buyer right now.

Start browsing now for your ideal Sotogrande home

With our website here at Property Sotogrande designed for quick and easy searching, it couldn’t be a more straightforward process to start browsing our listings for homes, villas and apartments in this exceedingly desirable part of the country.

Why approach just one real estate agency in Sotogrande to begin with, when you can review the latest opportunities from multiple trusted estate agents simultaneously? Whatever your wishes from the world of Sotogrande property may be, we wish you the very best of luck in your search!